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Greece: A crisis hurting millions to protect Europe's millionaires

1 May 2012

TSSA recently joined a delegation to meet and offer solidarity to Greek trade unions, politicians and campaigners and to see first-hand the dire impact that austerity without end is having on ordinary people. Ben Soffa reports.

Whenever the latest round of negotiations throws ‘Greece’ into the headlines, it’s all to easy to think of the problem as one being faced by one of a dozen or so men and women in suits, sat around a Brussels table. Yet just a few hours spent in Athens is enough to show that whilst it might be the finance ministers and bankers we see on the news, this is a crisis hammering down the living standards of every Greek person in a very real way.

The delegation of British trade unionists, campaigners and journalists came about in response to a call for solidarity from two heroes of Greece’s modern history: Manolis Glezos and Mikis Theodorakis. Both now in their late 80s, they are amongst the most respected political and cultural figures in Greece, not least due to their inspiring actions during Greece’s darkest periods of the last century.

Shortly after the Nazis occupied Athens Manolis Glezos climbed the walls of the Acropolis under cover of darkness to tear down the swastika which had replaced the Greek flag on the summit. In what is recognised as the first direct act of resistance against the Nazi occupation, Glezos – sentence to death multiple times over – helped bring about a movement that harried the occupiers until they were forced out.

Mikis Theodorakis, who was also involved in the Greek resistance, is best known internationally as the composer of the film score for Zorba the Greek. He also played a key role in opposing the Greek military junta of the 60s and 70s which banned his work and imprisoned him. Significantly, the involvement of Theodorakisshows the breadth of opposition to austerity, having served as a minister in the equivalent of the Conservative Party during the 1990s.

Austerity in Greece does not just mean a slight cut-back in some public services – it means a total transformation of the quality of life of millions. The cuts are pushing people to the edge – and then over it. Real absolute poverty is returning to the European Union, with tens of thousands dependent on soup kitchens. 1 in 5 can no longer afford to eat meat more than once or twice a week, with cases of child malnutrition growing at an alarming rate.

Many public sector workers – from teachers to police officers – have seen their wages cut by 40 per cent, with further cut-backs expected over the summer. The minimum wage is down, slashed by a brutal 32 per cent for those under 25 – a majority of whom – 51 per cent are now unemployed. Pensions have been attacked even more severely with 53 per cent of the value of pension funds taken without warning or consultation – of which one union member said ‘literally the Government are robbing us of our money. This will drive us to complete social exclusion and poverty very soon’. Vaccination programmed for children are being cut back and there are now an estimated 45,000 homeless people in Athens.

Tragically, yet unsurprisingly, a growing number of people simply can no longer continue. The Greek suicide rate has increased by 40 per cent in the last year.

The practical response – the ‘Potato Movement’

With millions facing such huge and immediate hardship, those fighting back against austerity have moved beyond political and industrial opposition, to building practical alternatives to help ease people’s lives. The so-called ‘potato movement’ – in which local councils and volunteers bring producers of staple foods – potatoes, flour, olive oil and rice – into their area to sell directly to consumers is one such example. Cutting out multiple levels of profit-taking in the supply chain has meant the difference between being able to put dinners on the table and not, for a growing number of Greeks.

People buy potatoes directly from farmers in Nea Kifisia, Athens, bypassing the supermarkets that many can no longer afford.

Workers put at risk

Amongst those met by the delegation were the leaders of the emergency services unions. One representative of the Fire Brigades Union described how severe cuts to funding meant his members’ lives were on the line: ‘We are facing the greatest danger of losing our own lives from the reduction of the assets, the budget, personal and mechanical equipment, all of which affected by cuts in the budget.’ He told the delegation how no appliances had been replaced for five years whilst others described staff paying for fuel and repairs to their fleet vehicles out of their own pockets. Fire crews were buying their own protective equipment as their brigade-issued gear wore out.

A pre-requisite for slashing workers pay and conditions was to attack their unions. As a member of the police union put it bluntly, ‘we are at the point where we are facing the destruction of unions in Greece’. As with many of the changes demanded by ‘the Troika’ – the grouping of the EU, European Central Bank and the IMF – Greek MPs had been handed hundreds of pages of legislation which included the repeal of labour protection laws late at night and made to vote it through the following morning. Rights that had been built up over decades were swept away without debate or discussion. 18 general strikes and a total collapse in support for the two main parties have had little impact on a parliament wedded to whatever policy is dictated by the Troika. The dozens of MPs, of both the left and right who have rebelled against their party leaderships to vote against the austerity measures have been summarily expelled, leading to a mix of anti-cuts parties, both old and new, which now commands over 40 per cent in the polls.

A downward spiral with no escape?

Greece’s economy is estimated to have shrunk by about a fifth since 2008. The costs of austerity – in terms of lost tax revenue and increased demand on benefits have pushed the deficit to a much higher level than when the cuts were first planned. Instead of reducing the debt, is has shot up from 130 per cent of GDP two years ago to over 160 per cent today. Austerity policies cut off the possibility of recovery, with what is described as ‘the bail out of Greece’ consisting mostly of a bail-out of international bankers. Of the €130 billion in the latest deal, the banks will get at least a half, through a mix of compensation, interest payments and cash injections. The rest is to be kept in a fund monitored by the Troika, only to be used for future debt repayments.

Alexis Tsipras MP, leader of Syriza, the Coalition of the Radical Left told us ‘Greece is being subjected to neo-liberal shock tactics as an experiment, to see how much pressure a society can take. We are the guinea-pig for extreme austerity, to test it before the model is exported to other countries. One of the driving objectives of the neo-liberal policy is the creation of a cheap labour force; another is the privatisation of national assets for the enrichment of the few.’

A common theme was that the crisis should not be seen as being isolated to Greece, but should serve as a warning to citizens across Europe.

The way forward

The groups we met advocated a range of alternatives, from the reintroduction of a national currency to a debt reset – an orderly default on the majority of past borrowing. The main issue for many was the question of in whose interests any deal was being struck – the people of Greece or the international creditors. As MP and former world-record javelin thrower Sofia Sakorafa pointed out, where the governments of Argentina and Iceland had taken a defiant approach to debt crises, a settlement was constructed that allowed a way out of their problems to the overwhelming benefit of their societies. Whilst it was in the interests of the IMF to push the same model of privatisation and deregulation wherever and whenever there was a crisis, the successes of other countries showed the ‘disaster narrative’ of the Greek government and its policy prescriptions were a choice and not a neicessity.

The myth of ‘lazy Greece’

One myth that has been widely peddled is that the Greek people brought this crisis on themselves by a combination of laziness and dependence on an overspending state. Yet official EU figures show this to be a total untruth. Research by the Chief Economist of French bank Natixis has shown that Greeks work some of the longest hours in Europe – in fact, on average, they work almost twice as long as the average German worker (2,119 hours compared to 1,390 hours). On average, Greeks also retire later than Germans. From 2000 until the start of the crisis, Greek government spending was lower as a proportion of the economy than in France or Germany – indeed it was below the EU average. Yet Greece faces a serious problem with underpaid tax. The country has the highest proportion of self-employed workers of any advanced economy, bringing with it the common problem of tax avoidance – with this being most severe amongst the rich. A study by the London School of Economics found that the richest 1 per cent under-report their incomes by 24 per cent, compared to 6 per cent for average earners. Whilst the real-world Greek economy stayed fairly healthy during the early years of the global economic crisis, the relative weakness of Greece’s finances caused international bond markets (which lend to governments) to massively increase the cost of borrowing to over ten times the rate Germany borrows at. This caused what could have been a controllable deficit to mushroom into a massive and unaffordable debt within a matter of months.